The owner of a 529 plan can change the beneficiary once a year, as long as the new designee is a family member.

Time Money reports.

What to Do With Leftover Money in Your College Savings Plan

Melissa Byers and Rich Rauh began stashing away money in 529 college savings accounts for their sons not long after they were born.

When their older son graduated from the University of California, San Diego, a public university, he still had money available in his account. But their younger son, who elected to go to Chapman University, a private and much costlier school, needed more than what was in his 529.

So the couple, who live in Lake Forest, California, took advantage of the flexibility they initially admired in 529 plans: They simply changed the beneficiary on the account from one son to another – without facing any taxes or penalties.